BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1457
AUTHOR: Evans
INTRODUCED: February 21, 2014
HEARING DATE: March 26, 2014
CONSULTANT: Bain
SUBJECT : Medical care: electronic treatment authorization
requests.
SUMMARY : Requires requests for authorization of services in the
Medi-Cal program, California Childrens Services Program, and the
Genetically Handicapped Persons Program to be submitted in an
electronic format determined by the Department of Health Care
Services (DHCS) and to be submitted via DHCS Internet Web site
or other electronic means designated by DHCS. Implements this
requirement by July 1, 2015, or a subsequent date determined by
the DHCS.
Existing law:
1.Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income individuals receive health care
benefits.
2.Requires DHCS to administer various health programs, including
the California Children's Services Program (CCS) and the
Genetically Handicapped Persons Program (GHPP). The CCS
Program provides diagnostic and treatment services, medical
case management, and medical and occupational therapy services
to eligible children and young adults less than 21 years of
age. Eligibility includes diagnosis of specified medical
conditions such as cancer, congenital heart disease, and
sickle cell anemia. GHPP provides medical care to individuals
with genetically handicapping conditions, including cystic
fibrosis, hemophilia, sickle cell disease, Huntington's
disease, Friedreich's Ataxia, and certain hereditary metabolic
disorders.
3.Requires the director of DHCS to require fully documented
medical justification from Medi-Cal providers that requested
services are medically necessary to prevent significant
illness, alleviate severe pain, protect life, or prevent
significant disability, on all requests for prior
authorization.
Continued---
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4.Requires prior authorization by DHCS or its designee for CCS
services provided, except as specified. Makes prior
authorization contingent on determination by DHCS or its
designee of all of the following:
a. The child receiving the services is confirmed
to be medically eligible for the CCS program;
b. The provider of the services is approved in
accordance with the standards of the CCS program; and,
c. The services authorized are medically
necessary to treat the child's CCS-eligible medical
condition.
This bill:
1.Requires, by July 1, 2015, or a subsequent date determined by
the DHCS, requests for authorization of services in CCS, GHPP
and Medi-Cal to be submitted in an electronic format
determined by DHCS and to be submitted via DHCS Internet Web
site or other electronic means designated by DHCS. Permits
DHCS to implement this requirement in phases.
2.Permits DHCS to designate an alternate format for submitting
requests for authorization of services when DHCS' Internet Web
site or other electronic means designated in 1) above are
unavailable due to an unplanned disruption.
3.Permits DHCS, without taking regulatory action, to implement,
interpret, or make specific this bill and any applicable
waivers and state plan amendments by means of all-county
letters, plan letters, plan or provider bulletins, or similar
instructions. Requires DHCS to adopt regulations by July 1,
2017, in accordance with the requirements of the
Administrative Procedure Act. Requires DHCS to consult with
interested parties and appropriate stakeholders in
implementing the provisions of this bill.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, streamlining the
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current Medi-Cal Authorization Requests (TARs and SARs)
processes to an electronic submission system would ensure that
Medi-Cal patients receive the necessary treatment and services
in a timely manner by reducing the risk of processing errors,
unauthorized disclosure of confidential health information and
a potential backlog of paperwork. Eighty-three percent of
pharmacy TARs and 77 percent of medical TARs are already
submitted electronically to DHCS through a secure department
internet system. Conversely, SARs for CCS and GHPP have not
yet transitioned to electronic submission. One uniform
submission process would allow DHCS to increase efficiency and
reduce administrative costs and aligns procedures to the
direction received from the federal government via the
Electronic Health Records Incentive Program.
2.Current TARs and SARs process. DHCS made electronic
submissions of TARs available to Medi-Cal provider statewide
starting in 2005. Since then, the use of the internet-based
submittal process has steadily grown. In fiscal year 2012-13,
DHCS received approximately 2.2 million TARs requiring
adjudication. As of July 2013, DHCS received 84 percent of
pharmacy TARs and 70 percent of medical TARs electronically.
Medi-Cal providers can submit TARs electronically through a
secure DHCS internet-based system, via mail, or by fax. When
providers electronically submit TARs, the accompanying
documents can be uploaded along with the TAR. DHCS staff can
then review the documentation directly from their computers
and adjudicate the TAR, and there is no paper for Xerox staff
(DHCS' fiscal intermediary) to prepare, route, or file.
In contrast, under CCS and GHPP, providers/counties submit all
SARs via mail or fax, which requires staff to manually log and
convert the files to a portable document format. Although CCS
uses a web-based tool that allows providers to electronically
access SARs (referred to as the Children's Medical Services
Network or CMS Net), CMS Net does not allow for electronic
submission of required medical justification. As a result, all
CCS medical eligibility reviews are performed manually.
When DHCS receives a paper TAR via mail or fax, Xerox staff
must first complete an intake process (date/time stamp,
sorting, routing, etc.) and then manually enter data from the
TAR into the Service Utilization Review, Guidance, and
Evaluation (SURGE) application that DHCS uses to adjudicate
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TARs. In addition, there may be medical documentation, such
as medical records, that accompanies the TAR. This
documentation cannot be entered (or uploaded) into SURGE, and
is instead made available to DHCS staff when the TAR is
adjudicated. When Xerox staff has entered the TAR data into
SURGE and DHCS staff has the medical documentation, the TAR
can be adjudicated. Once the TAR is adjudicated, Xerox staff
must then file the paper TAR and the accompanying
documentation. This process requires additional staff
resources and maintaining a secured storage location. DHCS is
planning to implement a new electronic TAR submission system,
with a tentative implementation date of July 1, 2015.
3.Support. This bill is sponsored by DHCS to streamline the
current TAR/SAR process by requiring all Medi-Cal providers,
excluding dental providers enrolled in the Denti-Cal Program,
to submit TARs and SARs electronically. DHCS argues the
current TAR and SAR submission methods involving different
processing methods reduces the overall efficiency of the TAR
and SAR review process as DHCS staff will have the ability to
route all incoming TARs/SARs to the appropriate office for
adjudication based on workload, volumes, and staff
availability. Additionally, paper submissions (by mail or fax)
place clients at an increased risk for unauthorized disclosure
of confidential protected health information because the data
is not directly transmitted from the provider to the DHCS
computer system. The proposed statutory change would allow
DHCS to have one uniform submission and adjudication system,
as opposed to the current separate electronic and paper-based
systems. The uniform system will improve efficiency and
consistency of TAR/SAR processing including the adjudication
timeframes, and there will be a reduced risk of information
security breaches because fewer individuals will view or
handle documents and the possibility of losing, misfiling, or
incorrectly mailing or faxing the TAR/SAR or related documents
will also be reduced. Finally, DHCS anticipates that it will
be able to reduce or eliminate administrative costs associated
with paper and fax submissions of TARs/SARs, such as fax
machines and toner, fax machine maintenance agreements,
storage space, paper purchases, postage costs, and support
staff.
4.Amendments. In discussions between committee staff, the
sponsor and the author's office, the author is proposing the
following amendments:
(a) To remove the phrase "Notwithstanding any other provision of
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law" in three parts of the bill as there is not a current
statutory requirement for paper submission of TARS and SARS
that needs to be "notwithstood";
(b) To require DHCS to designate an alternative format for
submitting requests for treatment authorization (rather than
allow DHCS to designate this), and to require this alternative
be used during a system disruption (rather than an "unplanned
disruption" in the existing language) as there may be
instances where providers would need to submit authorization
requests in situations that do not involve an unplanned
disruption (such as if the authorization system is taken down
for routine maintenance);
(c) To exclude TARS submitted by dental providers enrolled in
the Denti-Cal program from the requirement to submit
electronic TAR requirement as this amendment is consistent
with DHCS' intent.
SUPPORT AND OPPOSITION :
Support: Department of Health Care Services (sponsor)
Oppose: None received
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